We've been hearing a lot of criticism of Barack Obama in recent days from pro-Obama corners -- from celebrity investor Warren Buffett, from moderate conservative columnist David Brooks, from one of the Democratic Party's deepest thinkers, William Galston -- all along the same lines. Put aside your plans, announced in your budget, for national health insurance, for a cap-and-trade system to reduce greenhouse gases, for effectively abolishing the secret ballot in unionization elections. And, they might have added, for higher taxes on, and a reduction in, their charitable deductions to channel money away from charities and nonprofits and toward the government. Pay attention to the first thing on your platter and the nation's, Buffett and Brooks and Galston say: the financial crisis.
The answer Obama has given, in advance, is that we can only solve our economic problems by advancing these other programs. But the real answer came from White House Chief of Staff Rahm Emanuel in November: "Never let a serious crisis go to waste."
None of the issues addressed in the Obama budget was in any way a cause of the financial crisis. We did not have a housing bubble collapse because we don't have a national health insurance program. We don't have toxic waste clogging the balance sheets of the banks and other financial institutions because of carbon emissions. The Bush tax cuts were not a proximate cause of the giant public debt being run up under the Toxic Assets Relief Program or the 2009 stimulus package.
Moreover, as Galston points out, the New Deal doesn't provide a precedent for the Obama budget. In his first months in office, Franklin Roosevelt concentrated on repairing a financial system that was in much worse shape than ours is today, with most banks closed. Roosevelt got most of them open and running again. It was a couple of years later that the programs we remember the New Deal for were passed -- Social Security, the Wagner labor act, higher taxes on high earners. (Well, Roosevelt did sneak in repeal of Prohibition.) Even Roosevelt's first expansion of welfare rolls, at the end of 1933, was abruptly cancelled when the snows melted in spring 1934.
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